EUR/USD explores further downside ahead of EU GDP prints

EUR/USD

FXStreetJul 30, 2024 12:50 AM

EUR/USD lost grip of the 1.0850 level, poised for further downside.
EU GDP data due on Tuesday as Fed rate call looms ahead.
US NFP jobs data dump slated for Friday as markets bet on September rate cut.

EUR/USD lost control of a near-term bullish recovery, testing into fresh two-week lows near the 1.0800 handle as momentum drains out of the pair ahead of an update to pan-EU Gross Domestic Product (GDP) figures. The Federal Reserve’s (Fed) latest rate call is due on Wednesday, with another round of US Nonfarm Payrolls (NFP) on the books for Friday.

Forex Today: Flash GDPs in Europe and US jobs in the spotlight

A slew of European data is slated for Tuesday, with both German and pan-EU GDP update figures due during the Europe market session. QoQ German GDP is expected to ease to 0.1% in Q2 compared to the previous print of 0.2%, while annualized pan-EU GDP growth is forecast to increase to 0.6% from the previous 0.4%, though the QoQ figure for the second quarter is expected to tick down to 0.2% from the previous 0.3%.

Preliminary EU Harmonized Index of Consumer Prices (HICP) inflation is due on Wednesday, with YoY HICP inflation forecast to tick down to 2.8% from the previous 2.9%. After that, global markets will be pivoting to see the latest outing from the Fed.

The Federal Reserve's upcoming rate call on Wednesday will be closely watched by investors who are hoping for signs that the Fed is gearing up to implement a widely-anticipated rate cut when the Federal Open Market Committee (FOMC) meets again in September. The market is generally expecting a minimum 0.25% rate cut on September 18, with rate markets indicating a 90% likelihood of a 25 basis point reduction and a hopeful 10% chance of a larger cut, according to the CME's FedWatch Tool.

In addition, US Nonfarm Payroll (NFP) data is set to be released on Friday, which is an important factor in the Fed's employment criteria. Investors will be monitoring these figures closely in the hope of seeing a continued slowdown in hiring, which could encourage the Fed to initiate a new cycle of rate cuts in September. ADP Employment Change figures for July will be published on Wednesday, providing a forecast for Friday's NFP jobs report, but this forecast is somewhat unreliable due to its inconsistent track record for accuracy.

EUR/USD technical outlook

Fiber’s downside push into the 1.0800 region sees the pair coming back into range of the 200-day Exponential Moving Average (EMA) at 1.0795 as markets add in to EUR/USD’s near-term decline from multi-month highs that fell just short of breaking through 1.0950.

EUR/USD has fallen 1.3% top-to-bottom as bids backslide into long-term averages, and buyers are struggling to find a foothold as intraday price action battles with the 50-day EMA at 1.0818.

EUR/USD daily chart

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